Transcripts For CNBC Squawk On The Street 20130313

Current consensus, but retail will be the theme of the day, whether the consumer is back in a big way, whether it is a game changer and what that means for the market and the economy and Everything Else. I know well be talking about it it at noon. Were going to get our last word. They can talk about it for just one second and not that long because weve only got a minute and well talk to Henry Blodget and curtis artledge. You asked a question about jc penn penney. Maybe they can raise more cash, but theyre running out of cash at this point. They dont have that much left. You have a final thought on either jc penney or more importantly, the markets . I think todays entire discussion has been about the early stages of confidence building and we get past these two gigantic minefields of fiscal cliff and sequester. We start to see m a pickup and retail sales and theyre willing to spend money because theyre more scared about their job. We see Capital Expenditures and people starting to plan for them and sentiment, actually, when we talk about it i dont think theres that much complacency. People are still nervous. Scott, it was great having you here. Join us tomorrow, right now its time for sksquawk on the street. People all across america are cringing right now because that is probably the most annoying song on the planet, but you have to go back to 1996 and that was the year macarena hit number one on the charts for the last time the dow had a ninesession winning streak and the question is can the blue chips pull that off today . Good morning. Well will come to squawk on the street. Im melissa lee along with carl quintanilla, jim cramer and david faber on the new york stock exchange. We are looking at green arrows across the board and the action happening after the betterthanexpected retail Sales Numbers came out. A 1. 1 increase and that was the largest gain in five months. Take a look at the picture in europe. Whats notable here is italy had the first auction since the fitch upgrade and we did see yields there creep higher and we do have italy down 1. 5 . Overnight in asia, the big loser, but the road map starts off with the rally. The dow inches higher, but enough to score eight straight sessions of gains. All eyes are on the s p 500 which is flirting with the record closing high, just 13 points away. Sales seeing the biggest rise since september and rising core sales indicating maybe the consumer is not feeling the pinch of higher taxes. Meantime, coach popping premarket on an upgrade from city. As a new report shows that it has been outspending apple in advertising to clench the market share gains it has seen. One step closer to getting the 787 back in the skies. The nefaa, a step to ending the twomonth long grounding. We begin with the markets, by the skin of its teeth, the dow extending the winning streak and posting a record high close for the sixth consecutive day and the s p closed higher despite hitting fresh fiveyear highs during yesterdays session. The bright spots here is what we saw managed to close higher yesterday were cyclical areas, semiconductors, energy and we had health care participating in that rally and bristolmyers. 11year highs on that one. They screwed up badly and they bought a drug, not unlike glaxo they had, and it was red wine derivative drug and they fell. I will point out that the macarena is central to the thinking. Really . Because i went back and looked at this period november 1996 and was astonished at how everything was going right. Everything. That was a time when your pc was powerful enough to be able to get it it so you started getting dial up aol. We had no crises whatsoever. The bob rubin managing the economy, bill clinton getting Interest Rates down and what we have now is a compliant fed and weve got some good earnings, but i just dont think that we can put on the kind of numbers that yes, im worried about the nine Straight Days. So you say keep your bat on your shoulder. You say the guys are swinging wildly and thats not our style. Youre willing to miss a couple of points. Well look back at whats happened since the millennium began and there have been only a few instances where weve been able to go eight. Weve never been able to go nine since it started. Were 50 up, 50 down within a week. Almost always down within a month. So all im saying is find stocks that arent up if youre going to take a shot because these 52week high stocks, the stocks at a 52week high, they dont appeal to me as much as down and outers. Its interesting because they came out with another Technical Analysis there and came out with a note today, the correlation on the s p 500 are at year to date lows and it is a stock pickers market and its not all boats are rising with the tide. No. I did a piece about the casino stocks. Im not crazy about the casino stocks. China is not that great, vegas is dunn big. Las vegas sands, not that expensive. Those are good ideas. Stocks that are not up. The bulk shippers, yes, im scraping the bottom of the ship barrel, but those are are historicallied . A. This is where im looking. I am no longer looking at horizon which is about to break out because when that breaks out i feel im late, not early. Its already broken out. Its up 6 in a very short amount of time. Verizon is not google. No. It does have a 140 billion market value now. Its not a vodafone at this point. I dont want to there are so many that are still not stretched. General mills raised its dividends very big yesterday. Thats a Terrific Company and ken is doing a terrific job. If theyre paying 18, 19 times earnings and ill look at tech. Techs are at 10, 11 times earnings and i think that that is better. Banks because we have the stress test tomorrow. They could be better although they acted toppy yesterday and i was concerned. Interesting. That oracle upgrade says it is trading 11 times 2013. And that was oracle and thats an example of how can mark herd and Larry Ellison be trading at 11 times earnings and the hardware sales have bottomed and thats the sun micro. Thats intriguing to me. Intriguing, they say 20 upside intriguing on a onepoint multiple expansion. I never mind paying up 11 times earnings for a con sftent grower run by terrific people. I know there are people at hewlettpackard that will say he left the company in a shambles. Hes an aggressive guy and just like ellison, a very good company. Im a salesforce. Com guy. Mark benny and theyre at laggerheads, and sap at laggerheads, but this business is strong. Oracle has a very strong european business. I find that somewhere to look. Im looking for places where they havent hit them out yet. Right. Right. Speaking of retail sales, at least, better than expected jump by 1. 1 in february and thats the largest gain in five months. Take out autos, sales rose 1 . Results dampening fears that those higher payroll, will put a dent in consumer spenting. The firm saying the stock is trancinged to make growth play to a value play and any caution is appropriately priced into the shares. They do, however, list a bunch of concerns. Management changes, the yen, handbag intensification at the high end, 30 comps at coors and tory burch and they still upgraded to a buy. I think we get stocks down where they say be careful with the numbers. I think this best buy phenomena with goldman upgrading yesterday. The stock was down forever and now maybe someone will cirque willel and we obviously had rumors the other day that some of the European Luxury Companies would look at coach. Its very easy to craft a story to buy coach. Im trying to work with nicole erkin who is one of my associates. She happens to be here because people always want their name on. Their moms and dads like that. We always like coors, which is a better buy. Once a growth stock where they had a gigantic insider sale. I have to tell you, you have to step up to the plate. Really . Even citi says comps down 2 . They actually brought their comps in despite the upgrade. I know, but remember, best buy started good when everyone decided that the comps were absolutely hideous. Do i like coach . Im not excited the recent best buy does nothing for the stock. It stopped moving. Is coach 12, 13 best buy . I dont know. I understand. I like coors. Ever since they did that offering coors has been horrible, but the numbers have been good. I just find look, again, people want stocks that havent done anything because they want this is the new name phenomena. If a hedge fund, he had a couple of good years there i would i want new names. I dont want old names because im a coach. Whats the story of coach . Its going to go higher. 50,000. 50,000. Theres just a lot of momentum here. Why wouldnt you just stick with the names that are working . Because i feel like the the momentum could be played out, up to eight Straight Days. It makes me nervous. 9 in the s p . Joe dimaggio, 6 game, why not eight games . Yes, i do because you were in here, pfizer was the king of the market. 40 years annualized and 9 is 56 for the year. Have we had a year like that ever . How about another way to look at it. All of those worries about the payroll test versus the 60 plus who own houses. You listen frank blake, what a great get by the 2 00 show and Martha Stewart always looking good at 71 or 61. The woman at the stock. Frank is just now saying people are are beginning to spend more for the gdp on their home than they have before. The home is where the money is. So is the job. The job, home in other words, job beats payroll tax coming back. Yeah. Job is job is paper. House is scissors. And what is rock . What is rock . I dont know. What do you think . Should rock be stock portfolio . Thats a good one. Do you remember that game . Yes, i do. Or did you play threecard monty. Dice in the alley. Go back to 96. I mean, 96 was the period that we had the peace dividend. We had the incredible explosion in tech and now here we are saying, Morgan Stanley trips numbers intel . Those were the good times. You used to criticize me regularly in 96. I used to call you up and criticize you. Now i can just do it right here. Melissa and i were high schoolers. It was a great time. Everything was great then. They were watching, though. Sunrise senior living. I used to watch you in high school. I was watching deborah yesterday for ventas and im people are saying what a great performer and im checking it out as a place to live. The Business Roundtable is out with the latest ceo survey and our Steve Liesman has the results. Good morning, steve. Hang on a second because ill show you exactly whats wrong with this economy at the end of this report. The Business Roundtable index rising from 81 to 55. 6. Expectations increasing for the first time in a year so ceos getting more optomistic. They only nudged up their growth forecast from 2. 1 so basically looking for lackluster growth. They expect higher sales to boost the economy. Take a look at this chart and tell me whats wrong. They see sales on net, the percent saying sales will increase up 14 percentage points. Those who will do more capex is up 8 percentage points. And a hiring . A goose egg, nothing. Theyre no increase in hiring there and thats really what has bedevilled economists, policymakers and everybody about this economy, carl. Any echoes there, steve, out of fnib in the week . . No. I think there is a tale of two different economies here. These are more Large Businesses in this Business Roundtable and the Small Businesses have really, according to the nfib numbers, really taking it on the chin and its been tough sledding for them than it has been for the Large Businesses and Large Businesses remain optimistic and a little bit of a pickup in capex, and they remain very low off the lows of the recession, but not much. Fascinating numbers, steve. Jim, that might be the way it will be for a wheel. For term 2013. I think housing is the year for the turn. I understand these numbers. A lot of topdown numbers and a lot of business numbers. I find suspect. Theyve been a really bad tell for how the stock markets done. Housing has been crucial, okay . Housing has been the job generator and then oil and gas. Theres a fabulous article in the papers today about ohio booming. When we were in ohio to do the utica shale, we couldnt get a hotel room. These are real numbers coming in oil and gas. Well hear a bit from that yesterday, but this is a guy who is hiring furiously. Chart industries. What these guys have in common, oil and gas, that and housing, boeing gets 200 planes. Aerospace is a huge driver. A lot of coverage this week in ohio in utica, it is changing ways of life, no question about it. Yeah. When we come back, a wall street debut involving the second tech ipo of the year. Well talk about Silver Spring networks and bring you the opening trade. Trip adviser with a hot stock and a new milestone and well talk exclusively with the travel websites ceo. The retail sales number, the biggest beat above expectationses since december of 09. Squawk on the street live from post 9 when we return. [ male announcer ] ive seen incredible things. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. As samsung as samsung is gearing up for tomorrows launch of the z10 smartphone. New figures show samsung spent 401 million in advertising for its mobile phones in the u. S. Last year topping rival apples 333 million and that is from cantor media apple outspent samsung in the prior year and that is where samsung gained the market share here. The expectations for the galaxy, or the galaxy are really high. Apples stock has done nothing lately. Nothing. Wouldnt it be nothing how many times have we seen the apple launch and what would happen if we got the big galaxy launch and then galaxy peaks and apple actually goes up kind of like a i never like to invest in irony. Irony is the stuff of short stories like when we used to read o, henry when we were younger and it would be fitting that apple is going down, down, down, and the worst is over. Now i want to buy apple. You take a look at samsungs chart in korea because thats the best, most traded, obviously, share to watch. Its been a double over the past year. Past 52 weeks, the thing is up more than 100 . As it should be. We all have known its a brand name in the u. S. And not necessarily for phones except over the last few years that has transformed itself to a certain extent relying now for the smartphone for the bulk of its profitability and a lot of tvs, refrigerators and chips and Everything Else and an Incredible Company that spends more on rnd and they have more products and theyre larger, but nonetheless, interesting to note its not Just Marketing where they ramped it up. I think its a fifth of korean gdp, is this one company . Its amazing and now theyre trying to sort of present themselves as cool and hip. They created whats called a flash mob in new york citys times square yesterday. Take a look i dont know if we have sound of this or not, but take a quick look. Thats not a flash mob, is it . Y mean, four guys dancing around . Apple and one guy. Thats true. Is it hip . I dont know. Is it cool . Does it matter . I think, their microwave apple is a toaster. This is how were looking at everything now. The old apple, on friday would come up with something that literally is mind blowing. The new apple fights shareholders to return capital. The old apple was the essence of they have a flash mob right there and it will be a genuine flash mob. The new apple is, i think, its just going to come and go, the samsung. Theres no response team. Theres no s. W. A. T. Team. Theres no apple look, we have mojo. They have nomo joe. Samsung is in the right place at the right time. They have tablets and smartphones with the bigger screens and apple doesnt offer that. Whether or not samsung will come out with something thats mindblowing and revolutionary in the future, thats still to be seen, but right now they have the right product for the time. Its not like they have a partner thats moronic and it gets a lot of information for the cyber securities which did more Cyber Security violation . No. China still. The 7 million fines, not much, but they did admit to it, google, that is. Im raising my price target. Every time i see that car in my neighborhood, im going to care. Privacy was dead long time ago. Thats just the old first amendment, and it was pretty narrow. Second amendment. Congress will make no wrong. When we come back, a double dose of kramer and well get a mad dash and the u. S. Will be Energy Independent by the end of this year. Were back in a minute. [ female announcer ] its time for the annual shareholders meeting. Therell be the usual presentations on research. And development. Some new members of the team will be introduced. The chairman emeritus will distribute his usual wisdom. And you . Well, youre the chief life officer. You just need the right professional to help you take charge. We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. And dont get heartburn in the first place all stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Departure. Hertz gold plus rewards also offers ereturn our fastest way to return your car. Just note your mileage and zap youre outta there well email your receipt in a flash, too. Its just another way youll be traveling at the speed of hertz. We are on the verge of Energy Independence which is something every president s talked about since jimmy carter and nobodys been able to deliver. Verge means three years . Five years . By the end of this decade. By the end of the decade. That brings us to the mad dash. Something we talked about since, what . Nixon . And people are saying its here . Whats happened is that there is a technology play. Heckman recycles water. You need a lot of water to do all of this fracing. It went all of the way down to three. They are at the core of how where were drilling. 26 states. Were drilling everywhere, carl. Were finding in a lot of oil in places we havent found it. We are doing everything to make it so that you will be surprised how much we have. North dakota has 700,000 a day now barrels. Well have 1 Million Barrels a day in north dakota very quickly. You have to watch this because i think dick is being conservative, but we, if left alone by the government and if we have fewer bureaucrats and more drillers, yeah, its going to happen because theres Oil Everywhere in this country. Ox high owe, it turns out you remember ohio was the bedrock of oil and it turns out underneath the bed vok more oil especially out in west ohio. It is happening. We are seeing refineries being built to handle the methane and the e thain. We are becoming a major power in energy again and its happening much sooner than anybody thought. Americans will learn the words utica and marcellus and monterey very quickly. Dont forget, was there chevron yesterday saying theyll upgrade the refineries in california to handle crude. The refiners were able to handle dirty oil that we thought would come from the canadian tar sands and we have the cleanest oiln the world from the pocket, north dakota. When we come back, will the dows winning streak have nine lives . The opening bell is four minute away. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 Million Health insurance claims we process. So, its no surprise to you that companies depend on todays xerox for services that simplify how work gets done. Which is. Pretty much what weve always stood for. With xerox, youre ready for real business. [ male announcer ] this is karen and jeremiah. They dont know it yet, but theyre gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, theyll find some retirement people who are paid on salary, not commission. Theyll get straightforward guidance and be able to focus on other things, like each other, which isnt rocket science. Its just common sense. From td ameritrade. Youre watching squawk on the street live from the opening bell and the opening bell set to ring in less than a minutes time. We know fridays have been good this year. Every friday has been up. Tuesdays have also been up, nine in a row, robert hum who tracks statistics for us, tuesdays and fridays account for 87 of the dows gains year to date. 87 . Is that ridiculous . Thats a stat i absolutely love. People will start buying mondays because tuesdays good. Yeah. Its true because youre reversing a lot of the mondays that have been done. Lets get to the s p at the top of the screen as the dow goes for nine in a row, something it has not done since november of 1996. [ bell ringing ] at the big board today, Silver Spring, celebrating its ipo today and the ticker is ssni, and onyx, to combat cancer doing the honors. Well keep our eye on boeing to start. Fa assert phiing the redesign for the battery and one more step to getting that plane in the air and more work between now and that time. The stock run during worldwide is up 14 , close to 52week highs in todays session. Were just pennies away from the 52week high on boeing. So good news and it is all exacerbated by the short squeeze. People are waiting for that stock to krak because of the 787 grounding. The 787, we have the sequester and every time you look at it, its boeing. This is again, a triumph is in this market over the wall of worry over what boeing is exhibiting. Its reminiscent somewhat of walmart after the sapa story and what did it do . It went up every single day. And people were shorting it off of mexico not realizing that was old news and frankly, these are Great American companies that are doing walmart is a wellrun company as you know from the age of walmart. Boeing and mcnerney is great. When these guys tell you theyre fine. They dont know what theyre talking about. Mcnerney did not hype the situation and tell you not to worry about it. What he did was quietly develop a solution that i think will work. Boeing, by the way, 52week highs right out of the gate here in the session. Were also watching shares like bristol myers. We saw it hit fresh 52week highs and this is another one of these sectors that every day, marching to new highs and bmy holding on close to 11year highs and not just the 52week here. So nice strength there by bmy. I was listening to some this morning saying theres fatigue on the upside, and i think that can happen in europe where the fundamentals arent so hot. I say find stocks that are down, but when i listen to statistics like what you gave us, carl in the tuesdays and i keep thinking of the days that i would come on and squawk with mark haynes and you, and it would be wednesday and i would say you have to get in on friday because mondays are great and you would look at me and thats when he came with reverend jim bob and the church that was working now. It was on fire. Those days were just mayhem. Do you remember what used to happen . Of course, i do. Ktel, thats the one i always come back to. Ktel. Nice. Anything with a dotcom in it those were those were Interesting Times to say the least. The valuation stretched it. Now look at this oracle run. Maybe it will go to 11 times earnings from 10. Yahoo was trading at hundreds of times revenues and they were going to buy broadcast. Com with mark cuban. They didnt. It was just a different time. Its not exciting. I heard someone the other day, and there was a guest coming on and i wont reveal his name and say it was just an exciting time. No. Its an interesting time. No one wants to with so many bulls and the teenage bears, no one wants to say this is terrific. I dont want to say it because its been so painful when you say it. Thats true. That hot stove factor weighing in. Yeah. Its true. This ipo is interesting. Silver spring as we continue to watch before the open. They provide solutions for small Energy Networks and the commonwealth of the world. Florida power and light trying to get operational efficiencies off the grid. Its sort of a Technology Meets cleaner energy sort of play and they make the hardware and the software that allow utilities to plug into the smart grid, but the comparisons will be two Technology Ipos or to Clean Energy Ipos and we have silver city to be initially out of the gate and it slashed the offering. Since then, the shares have doubled since the interesting outperforming in the sector. He talks a very big game. Yeah. So far the stocks have been good even if the numbers havent. This one, by the way, ssni, highly anticipated and increased by a third the amount it decided to raise. At the end of the day, 4. 75 million shares, and of course, they added a million shares and they were able to keep that range even though they increased so dramatically. You were asking me about rerzon and we were talking about november 96 and that is when i broke my First Telecom story. Nci bought by british telecom. 22 million. A number of others, verizon wanting to buy airtouch which ended up with the verizonvodafone partnership. There say lot of talk about whether it will be one reason yet stock has been moving up rather sharply. Never a better time, many would say, but while this has been the talk of the Hedge Fund Community of late, i can tell you at this point that may be all that is. Its not clear if there are talks going on between verizon and vodafone. The question is not verizon. It has been willing and wants to buy what it doesnt already own of verizon wireless. The question is vodafone and whether or not it is really ready to commit itself to that undertaking, selling what is its best asset given the dysfunction that its seeing in the european wireless market and what the strategy were to find itself with an enormous amount of cash on its hand. What would it do . David, i think this is important for one very big reason. Weve had a stock market thats levitated, but if you get a transformational deal that is what . 100 billion. Or more. What that says is were in a brave new world of transaction size. Yes. Listen, it would be verizon borrowing enormously and using its stock and there are so many different issues that are part of this, and theres a question how taxefficient vodafone can make it and whether there are enough shareholders there that are getting active within the stock and management privately, not necessarily publicly saying you have got to do this now. The time has never been better. Verizon can borrow at extraordinarily low rates and pay you top dollar now. This is not fanciful. I think this is what matters. You say theres a lot of chatter, maybe no deal. The Hedge Fund Community loves vodafone because they look at it and say maybe you get something, maybe you dont, but my down side even if nothing happens is very limited because its got a great yield so ill take it even if there is a market break, how much is vodafone going to be down . You wake up and you get that deal and the market will be up big. Lets check in with bob pisani. Hes here somewhere in the crowd where ssni is set to start trading. Bob . It looks like well get a fairly nice pop here. Right now were looking around 21. Its still settling down and there are still bids and offers and well see what the final price is, but thats pretty good here. Priced at 17. That was the midrange of the price talk and their 16 to 18 and they did range the offering of the shares here from 3. 7 to 4. 8 million. So you increase the amount of shares outstanding by almost a third there, thats a significant number and theyre floating around 21. Well get to that as soon as it starts. I think were just a few minute away from that. Meantime, whatever happened that the tax refunds would weigh in on retail sales . All of the analysts were weighing the retail sales. Jeep, the numbers were stronger than expected if we had revisions in january after that. Retail sales are about 30 of consumer spending. This is very good news for the gdp numbers. Indeed, barclays came out immediately within 15 minutes and raised their gdp estimates for the First Quarter and they now have 2. 2 gain from 1. 9 . Thats not an insignificant number and all of this is general le pretty good and did you see the effect its had on the dollar and its been on an absolute tear, and the dow index is up 4 and maybe 4 in the last few weeks and that means up against the yen and the sterling and the euro. Of course, some concerns about the strength of the dollar, but were getting the strengthening dollar. We have ism and nonfarm payrolls that are better overall. The bottom line is that the u. S. Economy is outperforming the rest of the world that is being reflected in the dollar and its also being reflected in our stock Market Performance here. Were not doing particularly great right now. Were up two point, but if the dow closies on the upside day. Nine Straight Days and were in the last minute or so yesterday checked into positive territory, but the dow hasnt closed up nine days in 16 years. 16 years. Just think about that, that will get attention overall. The italian elections are killing the italian stock market. The rest of the europe is doing well. Portugal is up 7 , greece is up 5 , and although the italian stock market is poor, its down 3 on the year. Were still looking for some kind of opening on Silver Spring networks. It looks a little bit lower right now than the 21. Were still waiting for the price and ill stick around and it should be two or three minutes. Italy, ill congratulate ireland for coming back to the bond market in first time. The tenyear deal, austerity worked there. Tremendous wherewithal, the irish people to be able to accomplish that. And it wasnt because i went to an Irish Whiskey tasting last night that i say that. Bushmels. Rick santelli retail sales are better than expected and revisions better than expected although we get emails from so many traders, but this ones important. Nonseasonally adjusted is a bit different from the retail Sales Numbers. Theyre not positive, but of course, apples to oranges view any set of data series that you prefer. You see the chart of tenyear rates and open the chart up for november 1st and you heard bob talk about the dollar and the strength and you have to look at where the proactive move is and what happens in february . Italian elections. It removes us from the pattern and were kind of of back in it, but you can see on these big events whats moving the proactive markets and in that case it was europe. It was the same for the dollar index. It is strong, i understand that, but wheres the strength coming from . In many ways its european currency weakness. Japanese yen, weakness. Lets go and look at that euro i was talking about. Did you see the intraday chart . Yes, it was affected by some extent by positive retail sales. If you open this chart up, whats interesting is we are walking along the bottom here below 130 and its not far away from testing the low close at 129. 65ish. You can see this is the dollar versus the pound and were coming up a bit, up to where . Up to 150. So euro pivot 130 and pound pivot 150. Carl, back to you. Before we go to the i just want to switch to bob because this deal is open. Bob, can you hear me . 22. Quite a nice little pop there. Remember, the Company Provides software and Hardware Companies to allow utilities to connect essentially to the smart grid, priced at 17. The price talk was 16 to 18. They raised the amount of shares from 3. 7 to 4. 8 and thats a 30 increase in the amount of shares. Opening at 22 right now and a lot of very happy employees standing around right here all around me, guys. I always like to see that. Thats american capitalism in action. Back to you. American capitalists getting hurt in the dow right now, but thank you so much, bob. Lets go to Sharon Epperson at the nymex. Oil prices up for the fifth straight session and were seeing a pop in the wt icon tract due to the fact that we got a bullish report from the American Institute showing a decline in weekly crude supplies when analysts were expecting an increase. We are going to get the weekly data at 10 30 a. M. Eastern time. In terms of the u. S. Supply picture, its certainly having an impact on the narrowing of the spread that were seeing from brent and wti. The Global Benchmark for crude is having some influence from the rising production in the north sea and on the u. S. Supply front were looking at operations from the magellan pipeline starting up and that is expected to bring about 75,000 Barrels Per Day of crude oil from western texas to the houston area and add to that the fact that by the Third Quarter we may see it up to 225,000 a day and that is a packer thats causing the narrower of the spread between brent and wti. The contract breaks between the 302 to the down side. Key to trade sers twhoops that supply data that will come out at 10 30. Back to you. Keeping in energy, the latest salvo and the continuing battle over hess oil. This time its elliott respo responding to the big plan that we heard from hess itself only a short time ago. Returning 4 billion to shareholders in the form of repurchases and splitting, not splitting, but selling significant downstream assets and making it an upstream company. That was hess, and now it comes back and remember it owns four actually 4. 3 and bought a few shares along the way with another letter and another huge presentation as to why its not nearly enough. If you want to recall it, of course, itsel yet s. Slate. Carl kurz, david mcmanus, marshall smith, but theyre basically continuing to say many of the same things theyve been saying for quite some time, underperformance thats been caused by an unfocused portfolio, mismanagement of the bockin and they cite the management that paid themselves in 2012. Outside shareholders voted three times to destagger. Jim, this battle goes on, april 8th is the record date. May 16th leave is the actually annual meeting. Its elliotts five versus hess six. For its part hess said we never saw a proxy fight. The cease and attempt to lech wi date the company and deprive shareholders, of all of the investment that weve made in the back and theyre starting to realize and remember relational also involved here and they claim that elliott slate is inferior to those that they had proposed at hess. Where do you see this going for someone who knows and understands. The great nor weekon company and talked about why . Talking about how they own the pocket. That has dim inicing reserves in island. Thats my thinking. You believe thats a possibility. I only believe in one hess. They want a company that looks like a hess, it just happens to be a hess. It looks like and walks like and looks like a hess and that would be interesting just from what they said on mad money. They did not say we want hess, but they did say we want a company and the company they described looks a lot like hess. We should point out hess shares have been a strong performer since elliott showed up. Of course, they claim theres value over 120 a share. You laugh. People laugh. I remember how much they had to pay for gold. This would shock people because this amerada discovered the pocket. And when they discovered it in the 50s. It is what orson wells said the swiss, hundreds of years of civilization and all they come up with is the cuckoo clock. Thats all hess has come up with, the truck. I rest the prosecution rests coming up, meet the ceo of a start up which deems itself to be your window into the future. Stick around to find out why and tomorrow on closing bell, Steve Liesman will have an interview with new treasury secretary jacob lew. As we head to break, take a look at this weeks early movers here on wall street. Thank you orville and wilbur. Amelia. Neil and buzz for teaching us that you cant create the future. By clinging to the past. And with that youre history. Instead of looking behind. Delta is looking beyond. 80 thousand of us investing billions. 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Optionsxpress by charles schwab. In in anticipation of the galaxy s4, yesterday the company staged a flash mob in times square. It will be unveiling the s4 tomorrow at a launch event tomorrow night. This morning owe squawk on the tweet after seeing this video, what would be a new tag line for the samsung device. You can tweet us at squawk street. Well share your responses throughout the morning. A little oldfashioned, no . Everybody likes a new song and dance man, but thats where theyre headed. That was part of the oscars. Remember when apple was a triple threat, song and dance act . They were like olivier, remember that . Yes. Or the other guy from less miserables. They were like the chairman. Hugh jackman. Hugh jackman. Triple threat. I think i might have seen him in that video. Apple feels very onedimensional and a very big shot. Its not over yet. Its not over yet and if apple does it,. 1 of the things that i suggest every day. I suggest it, heres my laundry list of why apple is different. When they buy disney then the show will be over. . Very nice. Very nice. Heres whats coming up next on squawk on the street. Coming up, investing in this market can be as tough as an obstacle course, a dirty, muddy, ugly race, but weve got cramer here to steer you in the right direction. Six stocks in 60 seconds is next. Now go hit the showers. Well be right back. A conservative investor. But that doesnt mean i dont want to make money. I love making money. I try to be smart with my investments. I also try to keep my costs down. Whats your plan . Ishares. Low cost and tax efficient. Find out why nine out of ten large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possibloss o. Accelerrental. At a Hertz Expressrent kiosk, you can rent a car without a reservation. And without a line. Now thats a fast car. Its just another way youll be traveling at the speed of hertz. But i am your rmarket data. I know what youre looking for. Im not chained to your desk anymore. Im faster and smarter now. And so much less expensive. I am your market data. And if i do say so myself, i have never looked better. Superderivatives introduces dgx. Data done differently. In the in the next hour of the program we have bank of america and Merrill Lynch and they have a bullish note on these markets and buy on the dips and we can go 5 higher by the end of the year. The cofounder of tripadviser will be here in a very rare interview. The stocks up 22 just this year and also, carl, we will have the new York City Health commissioner here to defend their attempt to ban very large sodas. Back to you. Lets get six in 60. Six stocks in 60 seconds. Wag is the number two gainer. I have to down a gigantic big gulp or mountain dew to handle this one. I really like this call. Gillette has some news. Everybody rolls out neutral coverage, but this is a reminder. When pfizer bought this company, i would not sell it. Bmo likes it upper ware. This is direct buy. Carl icahn likes it because herbalife, he buys 322,041 in change. The new titans. Its cheap. And they buy the parts that go into samsung. Its a flash mob for qualcomm and broadcom. Numbers on bed bath . I still think bed bath could be a target of private equity people and one day ill get them to agree with me. Wyndham, number one stock. Why . Dividends and buybacks. 100,000 in properties. Unbelievable gains. Whats tonight . I have spirit look, ive been recommending the airlines. I know that means i should be certifiable or at least perhaps on the drug that was featured in homeland, but you know what . I genuinely believe that the airlines are back because its a slap happy oligopoly and whats better for stocks than a kind of a prices, say is not being that competitive . You got it. I dont want to run a foul of the antitrust division of the justice department. Well see you tonight, jim, at 6 00 and 11 00. When we come back, the galaxy 4 just a day away from the launch. What does it mean for apple . Well talk about that in a few minutes. Ou what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . Sales event has begun. Featuring the powerful gs. Just when you thought you had experienced performance a new ride comes along and changes everything. Get great values on your favorite lexus models during the command performance sales event. This is the pursuit of perfection. Welcome back to welcome back to squawk on the street. January business inventories just hit the wires up 1 and very similar in structure to the retail sales number, this is twice what we were expecting. Last month, upward revision from up. 1 to. 3. Were making widgets and the ultimate question is are they being purchased and are the the consumers locked and loaded . At least retail sales on a seasonally adjusted basis says yes. Carl, back to you. Rick, thank you so much. Check the Market Reaction to the data, doesnt look like much, but down 17 and we were down 24 a few moments ago. That is the worst decline since february 25th which is not surprising since its only been down one other time between now and then. S ps negative by two and the nasdaqs down about eight. The dow is turning lower after everyoning higher, but could we rally into the afternoon and will it be enough to see us and our ninth straight session of gains which we havent done since 96 . Last on the markets, to washington, president obama set to meet with ceos today to discuss efforts to improve Cyber Security. Who better to sit down with than the man who advises congress and the Obama Administration against hacker attacks. We have jim lewis of csis. A good day for tripadviser, the company celebrating its 100 millionth review online and well have an interview with the president , ceo and cofounder. All three major indices in the red this morning, but weve got someone who says the s p 500 is going to 1600 by the end of this year. Savita is with b of a Merrill Lynch. Always good to see you. Great to see you, too. Thanks for having me on. Obviously, rallies dont always hang on, so how does it play out in your view . Essentially, we see Economic Growth recover in the second half of the year and we get to a better place. Im actually surprised that the market hasnt hit, that the s p 500 hasnt hit a new high at this point and what i always go back to is earnings and we actually managed to grow earnings consistently since 2010. Earnings have continued to hit new highs for the corporate sector. So its almost surprising that we havent hit a new high on the market. Why do you think that is . Are there particular sectors where you think the performance isnt as strong as you would have thought by now and does make it a concern about your 1600 target . I think there are a couple of things going and i think theres skepticism about the strength and the longevity of this rally and the most kind of common worry that i hear is if you buy here there could be a better entry point, and if we do see a pullback. So it doesnt feel good to buy at these levels. One thing that im surprised by is the cheapness of some of the global cyclical sectors like tech, energy, industrials are trading at almost recessionary multiples relative to the market. My favorite statistic is that technology is now trading at a discount to the market. Utilities is trading at a premium which basically tells us that the market is expectingy regulated utilities to grow faster than a tech company and to me thats a wacky valuation world, but i think were doing what we do in the beginnings of a bull market which is to climb that wall of worry and all of the statistics, Economic Data and earnings can continue to be positive and until we see real changes on the fundamental front and i expect the market to kind of climb that wall of worry. This is a very bullish note that youve recently put out here. Rising markets can persist for years after sentiment troughs. You say people should extend their investment horizons,y mean, what is the fundamental thing that you see that you put out such a bullish view of the markets. Weve been bullish for a couple of years now. I think what were watching is earnings. Every quarter we hear these headlines were about to see the First Quarter of negative Earnings Growth and yet the market consistently beats prior earnings numbers. Until those fundamentals change, i think theres no reason to shift out of e quites, and you know, on a relative basis. You look at bonds and other asset classes, equities actually offer very healthy yield prospectsa the this point. But youre saying something more than that. The rally that weve had so far is because of march and because of an expansion on what people are willing to pay for given income stream and thats a pivotal point, isnt it . So here whats changed is that weve started to see corporations signaling that theyll start to spend more on capex than what the world is expecting of them. We track the number of companies that are guiding above versus below current capexexpectations and this was a low number late last year and we started to hear more companies suggest that theyre planning to spend a little bit more replacing old capital and old equipment. Theyre starting to build a pipeline, so i think that that is a big change from the conservatism that we saw in the corporate sector last year. Maybe it took getting past the fiscal cliff and getting past some of the uncenter ney washington to get corporations a little bit aggressive on the spending front. Expecting this turn in sentiment on the parts of capex, et cetera, do you think it would be pruden for investors to invest in the cyclicals that are trading at a discount to the markets which might see the benefit when business is ramping up spending . Absolutely. I think these are typically the biggest beneficiaries of capex cycles and theyre discounting a pretty grim environment. So if theres any sort of an upside surprise in global Economic Growth or a u. S. Economic growth, i think these sectors could be the biggest outperformers over the next, say, 12 months. Right. And utilities stay clear . Utilities were underweight because of valuation. Its a bond proxy. It lags in an up market. Weve seen massive selling out of utilities in our flow data, so i think its probably, you know, a couple of years ago sector, but its not going to led in this type of market environment. Safitia, great speak to you. Thanks for your time. Net fleks is leading the way as it has all year long. Lets head back to josh lipton. Netflix is enjoying a nice pop this morning. Netflix introducing a new feature that will allow streaming members to link their netflix account to facebook. The integration will let members see what their friends have all been watching and all u. S. Netflix members will have access to the social feature by the end of this week. Netflix up 3 right now up some 100 so far this year. Simon, back to you. Interesting. The power of facebook, meanwhile the soda ban getting struck down at the 11th hour and mayor blookberg, and in the citys fight against sugary drinks. New yorks City Health Commissioner will join us live at the break. Is the dow now actually worth this as a true market . That controversial assessment next. All your important legal matters in just minutes. Protect your family. And launch your dreams. At legalzoom. Com we put the law on your side. The the u. S. Department of agriculture is considering buying 400,000 tons of sugar to stave off a wave of defaults by sugar processors that borrowed heavily under a government price support program. Hampton pearson joins us live now from washington. Its almost a french twist on free market capitalism, hampton. This is all base about based on a story of the wall street journal. Theyre buying 100 tons of sugar to protect sugar processors under a price support program. This would leave the usda program with an 80 million deficit according to the wall street journal. Sugar prices have fallen nearly 22 over the last year. The usda would not say which Sugar Company would have outstanding loans in the program and a final decision on whether to take this action will not come until next month and the spokesman telling cnbc news that any price support would keep sugar Prices Higher like mars and nestle as well as candy and breakfast serial producers. The govern withment support of sugar prices have been widely criticized for years. It creates an unfair import barrier for cheaper foreign sugar and drives up the prices for everyday consumers and a grgs gao put the price target at 9 million a year. Essentially, as we said, the usda telling us at cnbc no decision on what kind of price supports and how and when has actually been made by usda and yes, theyre looking at options and theyre evaluating the options and the u. S. Also has a common sugar market with countries like mexico so they can move as well. That can impact on the decision, but its definitely in play. Carl, back to you. Thanks for that. Hampton pearson in washington today. From sugar to sugary drinks, a new york judge putting a hold on the sugar ban that was supposed to kick in yesterday. Last night the latenight hosts put their own twists on that story. Its official, we can drink all of the large, sugary soda we want here in new york city. I saw a woman today with a giant soda. Honest to god it was so big it had a pull handle and wheels. A judge declared the giant soda ban illegal. New yorkers immediately took to the streets to celebrate. It was crazy. Drink up, everybody. We won yeah, boy [ screaming ] some of us have to work in the morning thats funny, but it is clearly no laughing matter. The bloomberg administrations fighting the judges decision and it says 60 of adults are overweight and obesity continues to be a major problem in this city and across the country. Dr. Tom farm set Health Commissioner for the city of new york and he joins us here at post 9. Good to have you. Good to be here. I dont think you were able to hear that, but im sure you can imagine what they were saying. How does that make you feel . How does the city feel watching people making light of the issue. Thats a huge Health Crisis and were paying for it with our dollars in addition to our lives and more than 4 billion in medical costs in new york city axe loan. People we talk to keep saying wellintentioned and paved with good intentions, but the way the city went about it was arbitrary and capricious, the way the judge said. Citis response . Theyre certainly wrong in the health and the board of health has done a lot of things over a decade to protect the health of new yorkers. Banning lead and paint and this is exactly what the board of health was set up to do and we think it will prevail on appeal. How far will the city take appeals . To the court of appeals which is the highest level of court in the state of new york. Is this a socioeconomic problem, doctor, in that if you traced where the highest does it track to income . Absolutely. We released data yesterday showing theres a very strong correlation between the conception of sugary drinks and obesity at the neighborhood level and theyre the poorest neighborhoods in new york city where they market the drinks the most. To that point, youve probably read the New York Times this morning that has a frontpage article that this is not just a victory for the soft drinks industry. The Soda Companies and it is also a victory for many people and many organizers, hispanic, africanamerican organizations that are lined with them that may be hardest hit by the obesity epidemic. The New York Times points out that many of those organizations have received tens of millions of dollars from the Beverage Industry over the last few years. How do you react to that funding and a lot of it dates back to the Civil Rights Movement and it puts groups that should be in support of you in the state in which they dont otherwise speak up. Its terribly disappointing and the minority organizations and in return theyve gotten their support and its a big mistake for those minority organizations because the people theyre representing are the people suffering the most. I hope theyll turn around and recognize the things theyre doing to address obesity are good for their constituents. Why havent you aligned these groups with you or the popular press which is what we saw with the comedians last night. Theyre pricing the libertarian aspects of this which is not where they should be. Youre not pressuring them in the right direction. I think people are beginning to recognize that soda gains weight, but its tough for people to recognize that were driven largely by the portions that are put in front of us and a move like this will help people without them really noticing and still, people have the freedom who will consume what they want. Have you seen dim mission in the beverage at this point given the highprofile nature of this issue and the fact that it has received so much attention over the last few months. We have seen a change in attitudes and a lot of people dont recognize that they have just enough, and i think were moving out and well get people consuming less. Youre doing advertise ammen to walk off a 32ounce soda. Is it possible that education is enough . That these ad campaigns are enough instead of mandating what people can or cannot do . Well try on all front, but this is such a huge problem. I dont think we should only be talking about education. Again, more than half a million new yorkers have type 2 diabetes and this is preventable. When it comes to adults. Adults can buy cigarettes by the case load, right . Weve been able to put in cage limits and if they can buy cigarettes by the case load, why should soda be that way . If they want 32 ounces of soda. They can get 32 ounces of soda. Under this rule, its two cups and its really not that much of an inconvenience. Well see where it goes, dr. Farmee from new york city. Heres a trip adviser rallying 66 and the cofounder and ceo is here to join us live as it unveils a major milestone in squawk on the street. Will lenders start to relax requirements . Were talking housing. Thats straight ahead. [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the countrys largest petrochemical operation. When emerson takes up the challenge, its never been done before simply becomes consider it solved. Emerson. Here we are, me and you on the road and we know that it goes on and on [ female announcer ] youre the boss of your life. In charge of making memories and keeping promises. Ask your financial professional how lincoln financial can help you take charge of your future. Oh, oh, all the way oh, oh Energy Energy company is the second tech ipo of the year. Shares were 17 in the middle of the expected range, but most importantly it raised the number of shares it sold by 1 million. Despite the increase in terms of the number of shares offered it kept its range and its still seeing a nice pop, up 24 at this hour. Carl . The dow is always listed first ng moo the major indices, but should it be . And is it a solid a barometer as the s p . Our jane wells joins us. It is the king of indices and when it makes history, we notice. Here we go. In record territory on the Dow Jones Industrial average. Whats the big deal . The dows only 30 companies. The dow was much more dominant in our consciousness, and i actually think its fading a little bit and the s p has become more talked about, more dominant. See, if you measure the economy by the dow it says the u. S. Is made up of basically a bank, a plane, a phone, a computer, a can of coke, plus the can of viagra, downgrades and simba. The dow 30 companies have a total market cap of 4. 25 trillion. The s p 500 has more than three times that, so can only 30 Companies Really tell us whats going on in america . The truth is they do. I dont think they reflect the economy as well as the top 500, but listen, any time you pick the top 30 data points it gives you a pretty good indication. Okay, the dow and s p correlate, but not exactly, so whats a good analogy like the take to the s. A. T. , the dow is to the s p as if the dow is sexy ginger, the s p is reliable mary ann. The dow is an extra foam latte, and the s p, the coffee. Arod versus jeter, Golden Globes versus oscars, boxers versus briefs and it would be king, but frodo carried the ring. Bottom line, it is alcoa, but frodo is google, guys . Work with me. How do you follow that . Its the boxer briefs, i didnt get the boxer briefs thing, but but also i like that. The ginger mary ann debate has still never been settled. Theres no debate. Theres no debate, right, david . Yeah. Tina louise all of the way. Mary ann, don wells. Don wells, mary ann in the shorts. Tina louise . Theres no competition. Really isnt. It never has been. Google that, kids. Thank you, jane. The euro dropped to a threemonth low today after a rich italian bond action underscored continued under the italian election and is the real pain just Getting Started and how do you play it . Its money emotion and andrew bush is here from andrewbush. Com. Welcome to the program. So do you think the euro will continue to decline . It well, it certainly looks like gilligan to the skipper and the thats for sure. We had a recent low of 129. 70. Were trading around 129. 30 and the idea is to try to sell rallies, but simon, were getting close to a big level here and i want everybody to be alerted do it. Its a 200day moving average and well keep going at least another 200 points. Let me reframe the conversation. The Financial Times today has an article in which it suggests the stars are aligning for a major bull run on the dollar because of many, many reasons and one analyst is saying its becoming increasingly clear that the u. S. Is crawling out of the mud faster than any other developed economy. In that environment is the euro the best way to play it because some would say there is a crisis on the uk example. Theyve had major drops against the u. S. Dollar. We were up over 146 and 149 in the sterling. I think the euro is about to catch up to the currencies and i think weve run up as far as well go for the time being and i think euroyen will come under pressure and it will force it down more. In summary, what are the levels youre looking for, andrew . Sure. This morning i had it trading out at 130. 50. You can look to sell 129. 70 now. Look to double this short if you get below 1. 2865 and you want to take it back to 12865. Again, were seeing negative things happening. Trd youll get the Italian Parliament and theyll be unable to form a government and that will put more pressure on the euro. Thank you very much, andy bush and for more currency trades be sure to catch melissa on fridays at 5 30 and if you want more education on currencies, go to currency clash. The president set to meet with krs to discuss efforts to sit down with security, the man who advises against hacker attacks and thats jim lewis after the break. [ male announcer ] this is not my home. There. I said it. They dont have pictures of my kids. They dont have my yoga mat. And still, i feel at home. Could it be the flat screen tv . The not so mini fridge . The different free dinner almost every weeknight . Or maybe, its all of the above. And all the rest. Am i home . Nope. But it almost feels that way. Homewood suites by hilton. Be at home. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. Walk walk to squawk on the street. Im Sharon Epperson with the breaking news data on oil supplies. In the last week oil supplies rose by 2. 6 Million Barrels. Oil supplies were up by 2. 6 Million Barrels and were looking at gasoline supplies that were down significantly by more than 3. 5 Million Barrels in the past week. Gasoline supplies declined by more than 3. 5 million farrells and fuel supplies were almost flat increasing by 830,000 barrels. Keep in mind, we are looking at reaction immediately in the oil price. Were off of our highs of the session, but still above 93 a barrel and were continuing to see a surge in gasoline futures on this bullish data that has just come out from the Energy Department on gasoline supplies following more than double what analysts were anticipating. We are looking at gasoline prices that are around 8. 18 in the futures market. Thank you very much, Sharon Epperson at the nymex. Are banks and lenders starting to loosen up the purse strings. Diana olick was tweeting about this earlier this morning. Hi, diana. Hi, carl. In a word, yes. Its just what we need as Mortgage Rates are rising. It is finally getting slightly easier to get a low down payment loan. Now i am not talking about the low doc, nodoc loans from the bubble years and im talking about the 30year fixed well underwritten loans and with just 3 down, why is the freeze fine . Two reasons. The fha which was the only low down payment game in town continues to raise its premiums thanks to a 16 billion shortfall, so its loans are getting more expensive and Mortgage Rates are rising. So banks are looking for more business hence loosening up on the home purchase loans. Fannie mae tells cnbc it is now buying more home purchase loans with 2 and 3 down. That was 14 at the beginning of last year of the business and it has risen each quart wither consecutively to 18 and it could be close to 20 of the share now. Fanny mae does require private mortgage insurance, but theyve been loosening up as well. Remember, they got slammed during the housing prices, but as home prices are rising theyre beginning to loosen again. Radian, fdic and genworth and theyre positively spiking and you can expect that to continue as home refis drop and home purchase loans rise. Just today the Mortgage Bankers association reportsed rates on the 30year fixed jumped to 3. 81 to 3. 7 and that caused a drop in refis. Congress is looking to shrink fha shares and that would benefit the mortgage insurers and well talk about that later coming up on you poor lunch and theres always more online at rootycheck. Cnbc. Com. Weve got breaking news out of d. C. And we want to send it over to eamon javers for the latest. Were looking ahead to a white house meeting on Cyber Security later this afternoon. Theyll hold the meeting in a situation room and thats a rare and unusual setting that amps up the drama around the impact of Cyber Security on the nations security. The white house is a little bit cagey here on the list of ceos who are going to attend, but i am told that jamie dimon of j. P. Morgan will be one of the ceos who is in the room for that meeting. So thats something that well be watching for this afternoon. Obviously, the white house has been making a big push on Cyber Security with an executive order from the president and yesterday we heard from a whole range of u. S. Intelligence and military officials about new Cyber Security options that the u. S. Military is putting place. A big, coordinated push from the white house to the pentagon to the corporate suite. Melissa . Eamon, thank you for that. For more on the Cyber Security and the growing threat of cyber attacks. Lets bring in jim lewis, senior fellow with the center of strategic and governmental studies and jim, its always great to speak with you. Glad to be here. This seems to be reaching some sort of a fevered pitch in that the white house is meeting with ceos and were hearing more and more about attack, but can you put it into context for us . Is it that the problem has gotten more acute or is it just that were more aware of the breaches . Its gotten worse. Last year was a bad year. You had not only the chinese espionage which is kind of maxed out. You had russian cyber crime aimed at Financial Institutions and the new entrant, you had the iranians both attacking aramco and going after u. S. Banks and it was those three things together that made it something that can no longer be put on the backburner. I think one of the problems in the course of all these Cyber Security attacks, jim, has been what is the appropriate response to this. In your view, when you talk about these sorts of attacks that you mentioned is it appropriate . Has that simply not been figured out yet . The administration said they would use preemptive attacks if they saw something developing that could harm american lives or the the u. S. Economy. We havent seen them use any preemptive attacks and its easy to misinterpret that. The real answer is that you have a hardened network at home and you have to work with partners for how we be haef in cybersp e cyberspace. Weve been covering this issue for some time before we started to get this very, very wide sense of urgency and publicity. And even now it doesnt seem that there is a willingness to come public to the scene and not to mention the sharing of information. Is that dynamic changing at all . No. Theres real risk to dumps in coming out and admitting that theyve lost valuable intellectual property or they had major financial losses so thats not going to change. People agree with you that the sea suite is the focus and thats part of why the president is doing this. We realized that just tucking to the cios doesnt do it, you to go after the board and the ceo. It should be more than that. This country spends 600 billion a year on defense and even yesterday when the pentagon was up before congress and they were talking about creating 40 offensive Cyber Security teams, not by the end of this year or by the end of next year, but by the end of the year after that by 2015. That ridiculous ay behalf, what went wrong . Last years failure is a good example of what went wrong. You have strong pressure from the Business Community and the privacy xhunity and we have people who will need to reveal itself. They shaped policy for a long time and i think the big turning point was the failure in congress and people said we have to move out and we have to get the executive branch going. Jim, in terms of the meeting today, what do you expect to come out of it, if anything . Are they going to announce anything specific or will they go to the podium and announce something . The first thing is measures against china. You know, last Year Companies werent eager to do things that might irritate the chinese, and i think thats changed and theyre going hear from their president that the u. S. Is going to be ratcheting up pressure china. To get the sea suite to focus on this. Their losses are immense. Its not and the president said its time for the Public Sector to work together. You guys need to work on your own network. Forgive me if this is too much of a layman question and there iss story about the cloud. Today it involves google trying to ramp up their own competitiveness in that space. Does that make a difference . Does the cloud leave us vulnerable to the way we were with the farm of servers in our own office . It leaves you about the same. If itss good cloud cop tack its better, nooul be if a fog, and that wont share the situation when we know how to do this better, cloud providers will make you more secure, but right now things could not possibly get worse when it comes to economic espionage. They couldnt get worse . Why couldnt they get worse . They could not get worse because its maxed out. Why is it macked out . Because it is so easy to get into corporate networks. We did a survey last month and it was shocking. A determined 12yearold with a good Internet Access could download the tools that 90 of the successful attacks require only the most basic techniques. Its time to grow up and admit the internet is not a safe neighborhood and we have to do Different Things than just sort of go on blissfully assuming its safe. Not to scare people, jechl, in term of the next level of attac attacks, could the power gretd came out at this point. I dont know. Im not willing to say no and im not willing to say yes. One of the signs that this is harder than it looks is its never happened, right . It does tiake a lot of effort. Espionage crime, thats easy, but the kind of physical destruction that youre talking about that we saw with stocks and going after Critical Infrastructure that turns out to be hard, but people are developing the skills and people are developing the tools. If we stay on the path we are now we will see those attacks and thats yet president is meeting with people. It doesnt mean you should go home and buy a generator. No, people are safe, but its a growing risk. Great to speak with you. Thank you for your time. Jim lewis of csis. In corporate news, boeing has won approval from the faa to Start Testing a redesigned battery for the 787 dreamliner and that puts the Aerospace Giant one step closer to getting the airplane back into regular service. Phil berow has more for us. The storr is what were entering now is a period of several weeks where you see it testing the system for the 787 dream liner and this means when theyre manufacturing these planes theyll have to modify not only the design of the battery and awes the container of the battery and the system for monitoring those batteries. Faa has approved the 787 certification plan and it will conduct testing and fixes. Well see a couple of test planes that will be testing out conducting flights and checking out the battery fixes. It says the 787s return to commercial service for our customers and passengers. They want the axe surance that the improvement will make this airplane even better and thats what the test remember will do. Take a look at shares of bow coming is up yesterday and up after hors on wood that the faa had are had a prueded. Pulling back, action alley in jab jan, if boeing will meet the letters needed in order to make sure that the fix plan works and that the plan is safe then we could see the plane back in the air perhaps three, four, five weeks from now, maybe by the end of april. One other quick note, guys, some breaking news, henrik fisker, the founder and executive chairman of fisker automotive has just informed me that hes leaving the company and resigning of executive chairman over differences with the rest of the Leadership Team at fisker, regarding the direction of the company. Henrik fisker, the founder and executive of fisker automotive leaving the company. Back to you. Thank you very much, phil. Stocks have been on a tear rally, but if you missed out on the rally, what are the names that are worth buying now for the next leg if there is one . Still ahead, the smartphone wars are intensifying. Samsung unveiling its latest economy. Well find out whats up for apple, and more. And up next, a new milestone. ] the Worlds Largest travel site tripadviser just hit a new milestone, 100 million reviews on its site on its 19 brands and counting. Steve kaufner. Welcome to the program, sir. Its nice to have you here. This 100 million mark has come and last year it was 100 million travelers who have been on your sites and now its 100 million reviews and this time its testament to the power of your relationship with facebook. Facebook is certainly a part of it, but its really a test am to the worldwide interest in reading reviews and opinions from so many of your fellow travelers. 100 million reviews and opinions and this is from a Monthly User Base of about 200 million folks visiting the tripadviser sites each and every month across the globe. Yeah. Just on the subject of facebook, that ipo obviously taught a lot of investors to obsess about monetizing mobile. You are very relaxed about mobile. Smartphones accounted for less than 5 of your revenues last year and you dont expect it to improve much this year. Why are you so relaxed about that . We absolutely see our mobile usage improve in the monetization improve, as well, but for us theres so much more to planning a trip than can be done on a small screen. We think that the mobile opportunity is actually much bigger for trip adviser when someone is in destination, once theyre actually on the trip and now they have this incredibly connected device in their pocket to get more tips and opinions, review, whats near me now and wheres the best place to eat and where do i go next and all of the things one can do when theyre on the road. The next couple of months are very important and youll roll out meta display, whats called meta display to all of your tablet and desktop sessions. In laymans terms, can you explain what that will mean for people on your site, if, for example, theyre looking for a hotel which is half your traffic. Sure. So certainly looking for a hotel is one of the primary reasons folks come to tripadviser around the globe. Sure. And with the new meta interface one will be able to see a whole range of prices instantly available for any of the hotels that youre looking at. Youll be able to see those prices on tripadviser, to make that not only the best choice for the hotel for what youre looking for and the one thats available and one you can afford on this particular trip. Fewer popup windows. Technologically this is a complicated thing for you to go through. What is it good for the stock as if you pull it off. Why is it important for shareholders . Its all about capturing a user base and a Traveler Base that wants to come back to tripadviseor over and over again and we have done a good job because of these opinions and all of the members that love to contribute their content, one of the reasons thats been missing over the years is the ability to really help our ability to really help our travelers find the best price on the internet. And so with our wealth, our partnerclient relations, were not only able to point out the best property, but really the best place you might want to book the property. I should point out today people should be aware, its not just the tripped adviser brands. Once this new Technology Comes in, once you have this search, youre going to embark on something very new for the company, a very Large International Advertising Campaign, an offline Advertising Campaign that might be 40 or 50 million. So were going to see more of these brands everywhere effectively. Duds that mean were now in a discussion that we had with price line, for example . The tradeoff between margin and expansion. And is the old 50 basically history for you . Are you going to allow that to diminish as you chase for that International Coverage . Weve never been a company focused on the particular margin. Were focused on really helping as many travelers as we can plan and have the perfect trip. We have an incredible base and content from incredibly loyal members. The site continues to grow through word of mouth and all sorts of activitieactivities. Why not offer a tv campaign to help in International Market as well as the domestic market here. Next time, youre welcome to come on. I know its a busy day when that happens. But a lot of focus and a great start. The cofounder of tripped advise whn it comes to the fed, where is the real value in the market . Welcome welcome back to squawk on the street. Todays wednesday edition of the santelli exchange. You know, im always locked in debates that seem to last for years and years and years. Why . Because to me, facts dont go out of style. And we all know trying to calculate what is fair value, whether for Interest Rates or the stock market, and im not talking the disparity between a 4 00 eastern and a 4 15 eastern close. Im talking about worthy markets should be. We know the economy is kicking in for sure. So its like measuring height. Now you see here, measuring me, it looks pretty easy. It says well over six feet. Dan, come into the frame. How tall are you . About 66. We want to do some measuring. Maybe in the end the value is not where its at, it is what is on top of. So were going to talk about fair value, but not fair value like that. That would be too easy. Were going to talk about fair value like this. 85 billion a month. Thats a lot of fare. Where is it takes us . Heres the way i look at it. Its a great debate. Its why i get upset with the programs. Because they are not free and actual markets anymore. Lets say since march of 09 heres how much the stock market has rallied. What we dont know is where the stool is its standing on. In other words, is this much real . Is this much real . Is that much real . Why is it important . Because at some point like these stools the fed is going to be kicking these stools over. Its not going to have the market standing on 85 billion a month. Its going to have to wean off of that. Then i want you to get your ruler out and tell me what height the market is then. Back to you. Rick, thank you. Still ahead, the smart phone wars hitting a fever pitch. What does it mean for apple, blackberry and others . Back in two. [ construction sounds ] [ watch ticking ] [ engine revs ] come in. Got the coffee. That was fast. Were outta here. [ engine revs ] a talking car. But ill tell you what impresses me. A talking train. 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Its just another way youll be traveling at the speed of hertz. Amelia. Neil and buzz for teaching us that you cant create the future. By clinging to the past. And with that youre history. Instead of looking behind. Delta is looking beyond. 80 thousand of us investing billions. In everything from the best experiences below. To the finest comforts above. Were not simply saluting history. Were making it. Coming up on 11 00 a. M. Eastern time. A lot to watch tonight. You may have a pope this afternoon. Well continue to watch the chimney. Thats for sure. In the meantime we are committed to helping you play catchup on this rally. We have a technician on the stocks set to bounce who didnt participate on the rally, but theyre poised to. And the top picks for yields are not here in the u. S. Well name names. Is a new pope good for stocks . David . Thats a great question. Well see. Thats a good answer, too. Good answer. If youre just joining us, theres a look at the chimney. Cant wait for his recommendation. Heres what you missed if youre just tuning in. Welcome to hour three of squawk on the street. Heres whats happening so far. Do you think that for the next five years forecast margins are going to stay at record levels or will they collapse . I do think Profit Margins are likely to decline. This is samsungs time to really wow us, and if they can, they can scoop in when apple will have the year of iphone s. People all across america are cringing right now because thats probably the most annoying song on the planet. Find stocks that are not up. The 52week high stocks, the dow stocks they dont appeal to me as much. The new apple fights shareholders to return cap fall. I think people are beginning to recognize that soda is bad for you. Soda gains weight. Its tough for people to recognize we are driven largely by the portions put in front of us and this will help people without them really noticing and still allow people to consume what they really want. Good tuesday morning. Live here at the new york stock exchange. Want to get a check on the the markets today. The dough is trying to go for nine in a row today. Hasnt done that since november of 1996. Weve been in a tight range, but currently still down some 15 points. S p down as well. Naz down down a little less than a point. Netflix leading on word they are adding new social features starting today. Netflix streaming members in the u. S. Can link their accounts to facebook, letting members see what their friends have watched. And look at Silver Spring networks, soaring up to 20 on the first day of trading. The stock opening at 22 a share after pricing at 17. Time for the galaxys4 smart phone tomorrow. It will mean more losses for apple . Plus, the startup that wants to turn your calendar to the big essential network. Well talk about how focusing on the future is the key to their success. First up, the president is sitting down with ceos in the situation room to improve Cyber Security in the private industry. Good morning, carl. Its kind of a dramatic setting into the situation room. Not to read anything in particular to it. That has a little more seriousness than the other meeting rooms and Conference Rooms at the white house. The ceos will be attending the meeting. The white house has not put out a full list of who will be there. But jp morgans will be there. We saw key testimony from keith alexander. Hes the head of the nsa and the head of the Cyber Command telling the Congressional Panel theres a lot the United States needs to do on Cyber Security, including rolling out details on 13 new teams that will roll into effect by the fall of 2015. He said a tax on wall street grew significantly over the past six months. And he said 160 attacks on banks in the last six months. The u. S. Is very concerned about spatesponsored attacks coming. Were going to work on finding out who is invited to the meeting. A lot of people writing in saying they are glad. Cant wait to hear more. Lets get to the markets as the dow tries to hold onto record highs. Who has missed out on the the rally . And where can investors still find value . Larry adams is the chief strategist. Larry, good morning to you. Good morning, carl. You point out people get annoyed pointing out how well stocks have done this year. The action today, does it suggest that a real breather is finally upon us . I agree with you. Its human nature. But youre right. The reality is people have participated in the rally. Six the First Quarter of 2009 the equity markets have rallied. And so has the values of peoples port folios when it comes to equity. I dont think people have missed the rally but i think people are getting more cautious and skeptical about it. Youre right. The net worth numbers were interesting. We are hearing from Retail Investors saying i am just glad to this be even again. Is that a reasonable sentiment . Or should they be leaning into the wind . Now i think selectivity is very important. Some of the things is to get back a little bit on the u. S. Exposure and make look at lagging numbers in the market. Technology has rally sod far year to date, its been half of what the s p 500 has done. When you look at the growth prospects, theyre so much more attractive. Also if you want to go globally. Think of china. Theyre negative so far in 2013. That offers an opportunity for investors. Yeah. And its been a tough week in shanghai, as most of us know. Every time you think think its time to be more selective, you get data points that says maybe the economy is better than we think. Last week it was jobs. I see barkleys is taking up their estimate on inventorienve. I wonder if you think there is something to be said for sticking with domestic stocks, judgeg from what the data pointses are telling us. You have this split up between the economy and the evaluations in the market. I agree with you that theres more up side risk to Economic Growth. When i look at the expansion that we encountered over the last two or three years, i think the evaluation efforts are affair. When i look at the demographics, where gdp growth is. I think you can see some modest contractions before the end of the year in the equity space. Interesting. So your target. I say at the end of your target at the s p. Technicians would say if we bust above that 1565, if you take historical patterns into account, that means something more bullish. Youre not willing to go there. No. You have to keep in mind that this isnt necessarily were not looking to trade for a week or a month. This is looking out for the remainder of the year. There are risks in the second and Third Quarter. You will have sequestration cuts. You do have increasing taxes. And that usually first hits your savings and then impacts your spending pattern. So i think some thof the data could be weak, similar to what you saw in the previous two years. That is interesting. I guess some caution may be warranted. Finally, larry, you talk about tech. Are you willing to get more granular on that. Any specific areas within the sector that you think have been enough of a lager that theyre worth looking at . The areas we like the most are anything associated with the wireless component. You have a massive upgrade cycle taking place in the emerging markets. Over 80 of people in china have a cell phone, but only 8 have 3g capability. Were looking for a major up grade there. The expectations are pretty low. Tech at 8 for the year. I think we exceed that. Great stuff. Really great stuff. Thank you so much for your time. Larry joining us. Facebook is one of the worst performing jobs on the nasdaq 100 right now. Carl, thats right. We have our eyes on shares of facebook, down 2 on the day. Analysts point to a wall street journal article that came out last night for the reasons were seeing. The articles talked about guidelines released by the federal trade commission that says Marketing Companies need to apply the same standards to online ads as they do social media. It doeses that shortterm ads need to include one time of fine print. Well be sure to come back on when we get that back. Thank you for that. Apple has already lost nearly 40 over the last six months. Are those going to accelerate when samsung reveals the new galaxy smart phone later in the week. Find out ahead on the unveiling. First, Rick Santelli watching the markets closely. I watched high noon last night. Everything is about a gunfight. I like when they watch closer together. Nothing is going to be too far for richard today. Why . Were going to talk about gdp. It doesnt jive. Gdp is horrible. Earnings are great. Were going to cover it all. Boom, be there. Ary f we understand. Our Financial Advice is geared specifically to current and former military members and their families. Life brings obstacles. Usaa brings retirement advice. [ male announcer ] our usaa retirement guide provides advice for current and former military members and their families. Get advice from the people who share your values. For our free usaa retirement guide, call 877242usaa. Energy is energy is in the red today, the biggest loser in the group is volero. Josh has more on this. Josh . Life is good as an investor in refining stocks until it stinks. Thats the opening line in a note from mcqueary research downgrading a group of refiners. Holly frontier and cvr energy cutting price targets. The analyst notes refiners for u. S. Renewable fuel standards. That can materially impact earnings. All three stocks today in the red. Carl, back to you. Josh, coming back to you later on. Thanks a lot. Just one day to go until samsung, which is prepping for the launch of the galaxy 4. Our tavis mcchord is an analyst that joins us on the news line. Tavis, good morning. How you doing . Good. A lot of discussion today about the degree that theyre spending even more money than apple did last year on tv ads. Do they have the product . I think its going to be a great product. But i think theres just very little in terms of differentiation that you can still do on hardware in the space. The smartphone space is starting to be like the laptop space in terms of the degrees of differences and the hardware gets less and less. I dont expect a lot of new bells and whistles. It will have a better processer, better screen, better camera. But theres a little to what you can do. I think were kind of there. Do you think that will be true for the foreseeable future . Are there leaps Technology Still has to make to make a smartphone different . The next week would be really bendable screens, to the degree to which consumers would like that or how you would incorporate that into a smart phone is would be interesting. But thats probably kind of 2014 at the earliest. So it sounds like this is not the threat to apple that some talk about. There was obviously a lot of disapointment that the iphone 5 wasnt that different from the 4, et cetera. I think people are going to start to realize its not just apple, this is the logical conclusion to the forum factor that started in 2007. And its going to start to come down to do you want the ios operating system tor the android operating system . I dont think theres going to be a big differentiation in hardware from this point forward. There are pockets ov growth that samsung could steal from others. People continue to have conversations about the enterprise and corporate i. T. Is that an area where apple is truly vulnerable now . Yeah, i still think blackberry is the one that is more vulnerable. This whole byod trend in the enterprise only exists because of apple android and samsung are making end roads on the margin. All the data is a vast majority of demand is for apple based smart phones and tablets. All right, on march 7th you say the june quarter is not the reason to own the stock. Which a lot of people can understand. You still got the outperform and the 600 tarkt. I look at all stocks in terms of risk and reward. Theres two potential scenarios for pple. Either the operating system and eco system becomes less and less popular over time. Thats a low probability scenario. But if that happens, you could see margins continue to come down and Revenue Growth continue to come down. And you can probably put a reasonable scenario of 00 on the stock if everything went poorly over the next 18 months. Sure. You could also make an easy case that says, look, iphone s had more upgrades. They could enter lower end markets. Higher asps. A lot of things could get revenues reaccelerating over the next 12 to 18 months. And if so, its not a stretch to see the stock over 1800. A lot of the performance will depend on what product apple chooses to launch. Its difficult to predict. But i think the risk to reward is quite positive right now. Thats an interesting point. If youre range is that big, worst case to 300, best case to 800, then literally time will tell. Theres no way to know right now. This is very different than the previous five years. You were betting on an iphone going from 0 share to whatever it ended up being. Now this is really a bet on products nobody has seen yet. Im a little surprised the Investment Community hasnt given more credit and the company more credit given their history. It is what it is. The iphone in the current it ration has been played out about as well as it could be played. Now its a question of what can they do next. So it is what it is. Tavis, appreciate your time as always. Talk to you soon. Thank you. If you were spooked by boeings dream line product, you missed out on a gain. Shares up 10 since all the issues started. Well talk to one analyst who maintains his buy on the stock through all of that. Today is gonna be an important day for us. You ready . We wanna be our brothers keeper. Whats number two we wanna do . Bring it up to 90 decatherms. How bout ya, joe . Lets go ahead and bring it online. Attention on site, attention on site. Now starting unit nine. Some of the worlds cleanest gas turbines are now powering some of americas biggest cities. Siemens. Answers. Shares of boeing still trading near a 52week high. If you havent heard the news, the faa has approved beaus plan to test the improvement for the 787 dream liner. Thats the first step to returning that to service. We want to bring in the Single Research analyst on one of the deans of the industry. Good to see you again. Thank you. You were never nervous enough to take your buy off the name when things looked pretty dire. Why not . A couple of reasons. First i felt it was a binary situation. Either they would have a fix or the faa would say start over. I felt it would be politically difficult for the faa to say start over. And they also settled a labor contract. I think they were certainly nervous times. They could have had a fixed quicker and said the production schedules would be slowed down. That didnt happen. My expectation is they would not slow down unless it was somewhere in the area of nine months. I felt that was a reasonable bet to take. And secondly they had 13 billion dollars worth of cash it cost thel an incremental 300 Million Dollars or so in lost cash. So clearly they could handle that also. So here we are with the stock near a 52week high. If this thing gets back in the air in april, cai, we have budget plans being presented in congress proposing caps on defense spending. Why do you still see 15 upside from here . Okay. Good question we are looking for 9. We think it will be better in 2015. They have a couple of new programs theyre going to launch by the end of the year. 787 10 should be profitable. And were going to the Paris Air Show in the middle of june. Does any of the backlog give you worries . Labor strife may not be a story in the near term, but you never know what the long term brings. They have contracts with the i think nears for the next three to four years. Thats clearly not going to be an issue in this stock. Finally on the battery itself people eventually got back son the dc10. Maybe this is more of an airline problem. But do you have worries that people will be hesitant to get back on the plane even once the battery has been redesigned . Not really. People got back on the plane. You had a 747 disappear. Fuel tank exploded, pete get back on the plane. If the faa tells them its safe, i think people will get back on the plane certainly the Safety Record in this country has been unbelievable. Cai, well continue to watch your ratings. Thank you so much. When the Housing Market went bust, the ski market was one of the hardest hit areas. Now its coming back. Were going to show you the fanciest ski mansions on the market when squawk on the street continues. [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim. From td ameritrade. All on thinkorswim. music throughout why turbo . Trust us. Its just better to be in front. The sonata turbo. From hyundai. A. A couple of hours into trading. 11 30 on wall street. Better than expected retail sales. Ma macys hitting 52week high. Thats a new 52feet high. Saying its time to invest for the big pick schur. And shares of vm up 7 . The Software Company saying it needs to boost annual revenue by 20 in the coming years. Pivotal combines both companys Data Analytics and Cloud Application assets. Want to get to retail sales again. Jumping 1. 1 . Steve liesman is watching that and the way in which, steve, the numbers beat expectations, too. Yeah, and they did in a big way. Now theres a sense the overall u. S. Economy dodged a bullet in february. The net impact. It doesnt appear to be as much as feared. So the result, which is interesting, its rolling in every minute. But economists are increasing the outlook to 3 . And then the core sales, thats the number that feeds into gdp. A decent 0. 4 . Here tr the details, and theres a big story in the details. Gas station sales sorry, thats up 5 . Nonstore retailers, thats the internet. Up 1. 6. Grocery is up 0. 7 , and that seemed to come at the expense of people outing. Furniture down 1. 6 . That could have been the impact of the payroll tax cuts. In response to the hits to the rising gasoline prices, spending has not lost as much momentum as fears. Macro economiced a virzs joined others in upping their growth at 2. 46 . The 0. 1 there, they think that will come up to 0. 6 . So a Pretty Healthy rebound. That see that at 0. 6 . Government cut backs remain in place. The payroll tax hikes will continue to be a challenge to consumers. But the early read is higher income will be offsetting the impacts for now, carl. Im still trying to figure out the 20 year over year on Sporting Goods. Not hard to figure out. Sporting goods up 17. 5 . Probably guns. Thats the best explanation. Probably guns and all the talk about potential restrictions on it causing people to go to the Sporting Good stores and buy a few. Thanks, steve. We were just talking about why the numbers are so good. Were not adding to the rally. You want me to answer that . Generically i was hoping you would have an answer. Were about to hit the best point game for any quarter ever. And theres a lot of positively bias Economic Data sort of built in. Theyre expecting to see this because the markets have been moving up recently. Theres a very good chance well get to positive territory. Nine Straight Days if it happens. Thats the first time in 16 years they would have a nineday gain streak. A little bit of a schizophrenic market today. Risk on. Then parts of it are risk off here. Barrclays upgraded their gdp number twice. Up dated to 2. 2 on february retail sales then again to 2. 5 on the business inventory numbers. Were seeing moves up in transportation stocks. Theyre on the upside. Home building stocks are on the upside as well. Japan is on the upside. Aerospace stocks are up today. Then theres a risk off aspect. Theres concerns in china about them trying to slow the growth down a little bit. Steel stocks, copper stocks. You can buy these directly and own them. Australia is down. South africa. These are commodity producing countries all on the downside today. So theres a little bit of a strange market today. By the way, ive been asked about a lot to explain risk off and risk on. Is there a simple way to look at risk off or on . I do use a simple rule of thumb. Take a look at one of the biggest of the year. Power share low volatility pdf. Its very simple. Its the 100 lowest beta stocks in the s p 500. Just steadily climbing upward. Let me show yo whau is in these stocks. What is a low beta stock . Stocks that dont move much. So you have utilities and Consumer Staple Companies in here. If the s p is down 1 , this company, General Mills on average is only down 0. 17 . Thats what the data means. Is the opposite is the high data. S in the highest beta 100 stocks in the s p 500. You see the move down there at the end of february . Thats because the s p moved down. These stocks move aggressively when the market moves. Typically financial companies, steel companies, and even Home Building companies. I will close out to show you the difference between these stocks and how they move. So theres a simple way to talk about risk on and risk off. Yeah. And first solar is one of those. High beta all over the place. Not big in the s p 500. Thank you, bob. See you soon. Lets get a check on commodities, too. Hi, carl. Weve seen record interest here this week. And were looking at considerable momentum perhaps in the contract. We have seen wgi prices pull back from earlier gains off of the highs of the session after we got some bearish supply data from the Energy Supply department. We saw an increase in crude Oil Last Week more than analysts suggested. And it was far more interesting than last night showing a decline in supply. Keep in mind, the u. S. Supply picture is changing. We have seen a decline coming out of pushing oklahoma. That is, of course, the key hub for physical delivers of the futures. Thats a reason that oil prices are somewhat supportive and not in a negative territory despite the bearish department we got. We did see a big decline in gasoline prices. That is supportive of gasoline prices. Back to you. Thank you, thank you so much. Lets get to Rick Santelli in chicago. Hey, rick. Rich, i really enjoyed the pieces you write. And you have written some very fascinating pieces on trying to reconcile the motivational issues that move or raise gdp versus earnings. To the sound board we go. We want to talk about what the steet is looking for. 14. 7 . Earnings growth this year. Thats Earnings Growth. Thats right. Nominal gdp. Right. I know what real gdp was. Whats nominal gdp . For the year, anywhere between 3 and 4 now here is where it gets interesting. If we go back in time to 14. 7 earnings, what is the gdp pairings . We wanted to see what does it take on average. We found nominal gdp needs to grow at 7. 6 . Wow. Now lets reconcile these two, which is the point of why you are here today. This is much bigger than this. Whats going on . Its very simple. Nominal gdp is sales. Its growth. Its tough to grow earnings without sales. Where the gdp is 3 to 4 , the earnings dont grow. You would see a 7 decline on earnings or 13 . I know the 85 billion ab month. And this isnt the first program. Whats going on with the bank of the japan and European Central bank. How can that distort what were talking about . If you think about the environment you have very low wage growth. Very low Earnings Growth. What is happening with the Monetary System is were flooding the system with money, and we get data like we saw today where Energy Prices are spiking again. So you have little real disposable income available for the average household. Then we throw on higher Energy Prices. Its making gdp worse than it really is. One final thought. Today we had pieces of data. Retail sales. The bottom line is it was a great day if you sell gasoline. And you also saw import prices up month by month. Can i have your pen, please . What were nonfuel . Zero. Rich, you got to use the pen. Welcome to chicago. Back to you. Those are high honors, getting to use the white board. Well see you in a bit. Rick santelli. Lets get a quick market flash. Hey there, carl. Abercrombie fitch is growing today. At an industry conference the company says its reporting to get more personalized and streamlined with deals. Look for less broad based and more individualized deals. The stock is up 2 . Carl, back to you. Ski season may be cooling off here. But the market is heating up well look at the fanciest ski retreats on the market and find out how much cash youll need to get your hands on one. Later on, the detroit based startup that wants to turn your calendar into a social network. Squawk on the the street will be right back. At a dry cleaner, we replaced people with a machine. What . Customers didnt like it. So why do banks do it . Hello . Hello . if your bank doesnt let you talk to a real person 24 7, you need an ally. Hello . Ally bank. Your money needs an ally. [ shapiro ] at legalzoom, you can take care of virtually all your important legal matters in just minutes. Protect your family. And launch your dreams. At legalzoom. Com we put the law on your side. And launch your dreams. Its not what you think. Its a phoenix with 4 wheels. Its a hawk with night vision goggles. Its marching to the beat of a different drum. And where beauty meets brains. Its big ideas with smaller footprints. And knowing theres always more in the world to see. Its the allnew lincoln mkz. Coming up, what does todays strong retail number mean for the rally and your money . Our traders have their best ideas right now. David is making a big call on the market and halftime has it exclusively. And netflix already doubled this year. We goad headtohead on where the stock goes here. I think that call may be the reason to watch. Well see, scott, thanks again. A ski home market was among the hardest hit in the housing bust. But the market for mountain condos and villas is climbing back. Especially at the high end. Robert frank has a look at the monster mansions. Well, lets just face it. No one needs a ski chalet, so the market took a big crash in a recession, falling more than 80 in some areas. But now its finally getting a lift. Sales volumes up more than 50 in sun valley and 30 in vail. Average prices are up at almost all of the big resorts. Brokers are saying rising stocks are the biggest drivers with improving economy. Even the big Trophy Properties are back on the market. Especially in aspen. Far and away the most expensive ski community in the country. This mountain top mansion just near aspen has more than 200 acres, a dining room fit for royalty, an indoor peel. Always kept at a toasty 85 degrees and a hallway modeled after the hall of mirrors at versailles. Just look at those views. Price tag, 31. 5 million. If you prefer ski in and ski out of your mansion, well, theres this. A 20,000 squarefoot modern wonder that has its own indoor waterfall and lap pool. Bowling alley that becomes a shooting range. The house is also eco friendly. Theres not a single light switch in the entire house, and it has a spinning porsche platter to fit more into your 1,500 square foot garage. Maybe we can go half. We always say that. We never do. That rotating parking contraption is amazing. What kind of money are we talking about in terms of buyer geography . Just that platter you mentioned alone is a 50,000 toy. Were going to talk later on power launch about the more affordable ski homes. Lets keep in mind. People usually use the ski homes about two weeks a year. Youre talking about spending millions of dollars on a home. This is such a discretionary market and its been the last to really recover in the Housing Market. Its a good sign. Were fighting to see inventory come down and prices starting to firm again. I think its the last of the Housing Market recovery. Fascinating stuff. Well see you soon. Facebook and twitter have built an empire on telling us what just happened in other peoples lives. But what about whats going to happen . Telling us what our friends, our family, and our Favorite Companies are doing next. The companys ceo will join us on how he plans to make our calendars the new social network. E a business pro. Executor of efficiency. You can spot an amateur from a mile away. While going shoeless and metalfree in seconds. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Now this. Will work. [ male announcer ] just like you, business pro. Just like you. Go national. Go like a pro. Just like you. announcer at scottrade, our cexactly how they want. T with scottrades online banking, i get one view of my bank and brokerage accounts with one login. To easily move my money when i need to. Plus, when i call my local scottrade office, i can talk to someone who knows how i trade. Because i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Awarded fivestars from smartmoney magazine. Todays squawk breakthrough calls it the social breakthrough of tomorrow. Up to shows you whats going to happen by making your calendar social. Users follow each others schedules, publish their own schedules and can follow specific groups like your coworkers, family, friends, maybe a sports team or musician. Greg schwartz is cofounder of up to and joins us from detroit. Greg, good morning to you. Good morning, carl. Thanks for having me. Fascinating story whats happening. Lets first talk about detroit, dan gillpert is the mayor in so many different ways. Why so much activity coming from the motor city . Yeah, its an incredible time to be in detroit. I moved back here five years ago from new york and have been amazed at all of the activity. Theres a tech renaissance happening here, and its a new chapter for detroit. Its been exciting to be a part of. You have quicken loans led by dan, recently moved 7,500 employees moved to detroit. Small businesses, startups all part of a tech renaissance thats happening here. Restaurants opening up. Retail opening up. Residency, occupancy rates at record highs. Its really an exciting time to be in detroit. And it cant happen too quickly after what that citys been through the past few years. Walk me through the model here. We get alerts all the time about future event, future concerts coming to town, movie openings. I know when my friends birthdays are going to be, and i can tell an app how much in advance i want to know that. Whats new at up to thats different . Were doing for the camera what instagram did for the camera. Were making it more social and useful. Cameras are a huge part of our lives but they havent evolved. If you think did your calendar works well for keeping track of meetings and appointments, about thats about it. When it comes to Everything Else, whether whats coming up with my family and close freiens and plans theyre sharing and Favorite Sports Team and their upcoming events, kids schedules. These are thing, while we get a lot of inbound message, theres not a lot of great ways to handle the contentment you can pick which pieces you want to move onto your calendar. Youre seeing it in a unified stream on your iphone or android, along o side your existing content and with another tap, i can share that with specific and relevant groups. I can see my daughter has a school play coming up, a single tap, add that to my calendar and share it with my family, avoiding the emails and sms messages usually involved. I gotcha. 500,000 events have been shared on the platform. 2,000 public streams for people to follow. And now therell be this new premium application that will, i guess, boost the monetization. Walk me through that. Yeah, so were really excited what we call stream, public calendars of events, an thats following a school or sports team. We opened up the platform, so as of today, any Company Business or organization in the world can publish a stream, their calendar of events onto upto. And while we have a model thats free for any business organization, were also introducing a premium component to that model that lets businesses have access to analytics, who is saying that theyre in for going to an event, and richer feature set rolling out in the next few months. Finally, you were previously head of Digital Business for warner music. I just wonder what its like going from a behemoth like that to a startup like this with, what, ten employees at last check . Yeah, its definitely a lot different. It was a great experience, you know, being in new york. But theres nothing more exciting than being part of a startup. You know, doing it in detroit where youre part of not only growing a company but part of the comeback of a great city. Its been a phenomenal experience. Were thrilled to be doing it. Its a dream come true. Greg, appreciate your time. Were going to watch closely. Well see you soon. Thanks again. Thanks, carl. Greg schwartz with upto. A quick update on yesterdays squawk breakthrough. Deal flicks. There was so much traffic on both the deal flicks website and the app following our interview that their server crashed momentarily. Both are back running now. But you would recall it, it probably wouldnt be hard to find a clip of the interview. Keep the tweets coming. To promote his new galaxy s4 smartphone, samsung staged this, a flash mob in times square. The company will unveil the phone tomorrow night at a launch event. We want to know after seeing the dancers coming out of the box, what would be a good tag line in tweet us squawkstreet. [ male announcer ] when it comes to the financial obstacles military families face, we understand. Our Financial Advice is geared specifically to current and former military members and their families. [ laughs ] dad dad [ applause ] [ male announcer ] life brings obstacles. Usaa brings retirement advice. Call or visit us online. Were ready to help. Learn more with our free usaa retirement guide. Call 877242usaa. Therell be the usual presentations on research. And development. Some new members of the team will be introduced. The chairman emeritus will distribute his usual wisdom. And you . Well, youre the chief life officer. You just need the right professional to help you take charge. A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say